Business value is key

Business value is the key to job security!

In today’s economy, many of you reading this article will possibly become at risk in keeping your job over the next year. Some of you may have already heard the bad news as your company decides to reduce the number of staff.

This article is not intended to make you worry needlessly or to be a negative message. In fact, the message you should get from the content below is a very positive one.

Now, it is more important to have an IT organization that is appreciated and valued by your senior management team than ever. If you haven’t established this already, it may be too late to avoid the impending impact in your company from a souring economy. However, it’s never too late to start building a presence where you and your IT organization is appreciated and valued for what you do, , , so if it doesn’t already exist in your company, you need to get started RIGHT NOW !!

First step – understand the importance of business value.

Business managers want and need your IT help, but they do not and will not fully understand technology. There are exceptions to everything, but for the most part they don’t want to understand the technology. They just want to do their jobs and to support the company’s mission. They also want to keep their jobs as much as you do.

What business managers (senior managers and department managers of your company) do understand is business value. When you deliver business value, speak in business value terms, and do things that have business value implications, , , then, you get their attention and you gain respect and appreciation for your organization’s hard work.

However, if you cannot connect with your client (again, the senior managers and department managers of your company) on a business value level, it is difficult and potentially impossible to gain their respect and appreciation for what you and your organization do. They just don’t get it when you deliver technology.

It’s about the business. It is not about the technology.

Business value comes in many forms:
a. Increase revenue – Implementing technology that helps the company sell more of its existing products or services or sell new products or services.

b. Decrease expense – Decreasing a departmen’s expenses or avoiding costs by implementing technology.

c. Improve productivity – Improving a department’s people productivity so they can handle more work with existing employees and avoid hiring more employees or able to reduce staff.

d. Differentiate the company – Doing something that gives the company an advantage over its competition by differentiating the company’s offerings.

e. Improve client satisfaction – Retaining a client can be more cost effective than replacing a lost client with a new one. Improving client satisfaction can be valuable to a company.

In a “for-profit” company, there is a common theme in all of these elements. Each of these value propositions help the company become more profitable, , , and profitability is the name of the game in a “for-profit” company. Even in a “not-for-profit” company, increasing revenue, decreasing expense, improving productivity, etc. are important to help the company continue to operate and do the work of it’s mission more effectively. So, regardless of your situation business value is an important component in delivering technology support.

Your IT organization is the one organization in your company that can positively impact every organization or department in the company. No other organization in your company offers this much leverage to the senior management team.

The problem is that your senior managers won’t realize this much leverage is right under their noses if your organization has been delivering technology instead of business value.

Understand that most business managers see the IT managers of the company as technical managers, not business managers. You must change this perspective they have of you. And, when you do they will appreciate you for what you can do for the company and not see you as a “cost center”, or a manager who likes new toys, or an organization that simply likes to spend money.

An IT manager who delivers business value is viewed as a partner, , , a business partner to be valued for the positive contributions he has made in the past and can make to the company’s prosperity in the future.

Second step is simple: All IT initiative recommendations must be cost justified and provide tangible business value to the company.

You simply don’t work on things unless you can quantify the business value that will be gained when the project is completed and every recommendation is cost justified and easily understood by the management team.

This means you must be able to frame projects and discuss them in financial terms. Senior management won’t understand routers and switches, programming, and such technical things as you do; but they do understand revenue, expense, productivity and those type of discussions.

Your tendency is to discuss the issues in technical terms and when you do, you lose a business manager’s attention. Learn to discuss your projects in business value and benefits terms and you get their attention, , , and keep it.

When senior management has trust in you that everything you do provides business value and that you only spend money prudently (like a business owner would do), you will find they will appreciate their IT organization much more than you might imagine.

Let me give you an example, I’ve been very fortunate to have worked with some excellent senior management teams; I’ve also worked with a couple of weak teams. In my career, I’ve had two CEO’s ask me to spend more money in IT when they were cutting costs in other departments. The reason was the same in both situations, , , these CEOs understood the leverage value of an IT organization that delivers business value.

Insightful senior managers know that they can get much more cost savings from IT when we do things that reduces expenses or improves productivity in the bigger organizations. Sure, if they ask me to cut 10% from my budget in the 2nd half of a year, they will get something fairly tangible, , , but not nearly what they can get if I can implement technology that improves a much larger organization’s productivity considerably. Even better, this type of improvement is usually an ongoing benefit, not a one-time cost savings benefit.

You have to earn their confidence. To gain the trust of the business managers requires a third step:

Third step – establish a track record of success
1. All your recommendations are cost justified and have tangible business value
2. You deliver the approved projects successfully

Sounds pretty simple and it really is when you get right down to it. Business managers are looking for partners who help them achieve their goals and objectives. When you deliver what you say you will do and those deliverables include business value that helps a CEO or Department Manager achieve his/her objectives, you simply gain a lot of respect, trust, and value in their eyes.

They wouldn’t think of running the company without you when this partnership exists.

5 responses to “Business value is key

  1. Pingback: Educate senior managers about “IT leverage” | ITLever™

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